Betfair today demonstrated that the renewed health of the gambling industry by announcing that its Board has approved plans to float on the London Stock Exchange and thus become a public limited company. The estimated value which is between £1.16 billion and £1.48 billion could place it in the FTSE 250 index.
The gambling industry had been under a cloud since the US started imposing sanctions on foreign operators who infringe the ban on online gambling under US legislation. Indeed Betfair pulled previous plans to float.
To date, Betfair has steered clear of the US market by not accepting either US-based customers or credit card numbers. However, there are now positive signs that the US will lift the online ban enabling Betfair and other operators to expand into a very lucrative market.
Betfair is the world’s largest betting exchange; a form of online gambling where customers bet not against a bookmaker but each other. Bets are placed either for or against the occurrence of an event, e.g. that Bolton will beat Arsenal 3-0, with the odds offered or accepted between customers depending on their respective levels of confidence.
Under the Gambling Act 2005, there are ten different kinds of Operating Licence which the industry regulator i.e. the Gambling Commission can issue to reflect the precise activities of the operator. Betfair holds two Operating Licences - ‘Betting Intermediary’ and ‘General Betting’.